Swiss solar company signs $1b deal with CBD

Updated: 2012-12-10 17:23

By Liu Jia in Zug, Switzerland (chinadaily.com.cn)

The Swiss subsidiary of Jinko Solar, one of the world's largest silicon solar photovoltaic module suppliers, signed a strategic cooperation agreement with China Development Bank's Guangdong branch on Dec 7.

The deal, in which CBD promised to provide $1 billion to Jinko Solar over five years, was reached in Jinko Solar's European headquarters in Zug, Switzerland.

Jinko Solar officials said they will plan further expansion in Europe and the global solar market, even though Chinese solar suppliers are now dealing with rising protectionism in the US and Europe.

The aim of the expansion is to extend the downstream industrial chain business, seek potential merger and acquisition opportunities, and launch new solar panel projects overseas, Jinko Solar said.

The agreement with CDB will offer numerous advantages, including a long-term, stable source of capital and a complete set of financial services, the company said.

Chang Shouguo, vice president of CBD's Guangdong branch, expressed optimism about the potential of Jinko's solar power panel projects overseas, which he said will provide steady returns in the next five years.

"It's a start of our strategic partnership today," Chang said. "We look for more cooperation with Jinko in the field of renewable energy."

Jinko Solar Chairman Li Xiande said the deeper implication of the agreement is that it shows confidence about the global renewable-energy market from both parties — the leading PV producer, and a highly regarded financial institution.

"The demand for solar power still remains robust and keeps growing," Li said. Global installation of solar panels is expected to increase more than 20 percent in 2012, he added.

It is estimated that the sales revenue of Jinko will see a 20 to 30 percent year-on-year increase this year. As the only profit-making Chinese PV manufacturer in 2011, Jinko's sales revenue reached 14.6 billion yuan ($2.34 billion) last year.

The Zug-based subsidiary — Jinko Solar Switzerland AG — will be the platform on which the parent company will implement its global strategy efficiently.

"About half of our pipelines are in Europe," Li said. "That’s one reason why our Swiss subsidiary signed the agreement."

However, Li said that the EU's anti-dumping investigation on Chinese PV producers is unfair, and will hurt competition in the European solar market by forcing Chinese producers to reduce their market shares in Europe.

But Li expressed optimism that his company can still cooperate with European companies. "It is possible that we will invest directly in Europe," he said.

Jinko owns 13 overseas branches in addition to its manufacturing bases in Jiangxi and Zhejiang provinces at home.

Jinko has more than 10,000 employees worldwide. More job opportunities might be brought to Europe too if the Chinese solar giant succeeds in implementing its extension plans.

Guido Bulgheroni, deputy head of Economic Development Office in the Canton of Zug, said a number of multinational enterprises set up their European headquarters in Zug, including such big names as Royal Dutch Shell PLC.

As a low tax region, the corporate tax in Zug is 15 percent, 6 percent lower than the average Swiss corporate tax.

Bulgheroni said Zug has a package of attractive business incentives besides the tax.

"Zug is famous for its international environment, high quality of life, convenient transportation, liberal labor law, good service, and highly qualified professionals living here," he said.